A temporary restraining order was issued at 5 p.m. April 17, against the town of Bremen, prohibiting the town from taking any action in the disposal of a property taken by the town for delinquent taxes. The town is being sued by an entity named the Christiana Trust.
At their March 21 meeting, the board of selectmen set Thursday, April 18 as the date to open bids on a sealed-bid auction for a residence at 83 Turner Rd., after the owners Alton and Linda Simmons failed to pay property taxes for three years.
According to Bremen Town Clerk Martha Varsano, notice of the impending foreclosure was mailed to interested parties Nov. 29, 2012.
The temporary restraining order was sought by Shannon Merrill, an attorney at the firm of Bendett and McHugh, acting on behalf of Christiana Trust.
“According to the court, we cannot open bids tonight,” Pieh said April 18, following an executive session between the board and Town Attorney Jonathan Hull.
Five sealed bids were submitted to the town by the 5 p.m. deadline.
According to Hull, mortgage holder CitiFinancial alleged they were not properly notified by the town of its intent to foreclose on the property, prior to proceeding with the auction.
“They subsequently assigned it to Christiana Trust,” he said. Hull said the trust is managed by a bank in Florida. “Their claim is that the foreclosure tax lien was invalid because CitiFinancial did not receive proper statutory notice.”
Hull said a notice sent by mail to Citi’s address of record was returned to Bremen as undeliverable.
“They are required to receive notice 30 days before an automatic lien of foreclosure,” Hull said. He said CitiFinancial’s attorney was notified in November 2012 and again last January. “They claim notice to their attorney is not notice to them,” Hull said. “That is what this is going to turn on.”
Hull said he notified Christiana Trust of the situation in mid-April, approximately a week before bids were due to be opened.
He said the assignment of the mortgage at the end of March was recorded at the Lincoln County Register of Deeds “a couple of weeks ago.”
“Christiana Trust was not a lien holder at the time we foreclosed,” Hull said. He said all notices sent by the town in the matter were sent return receipt requested and all email messages and replies were time dated.
“We have a hearing tentatively set for next week on the temporary restraining order,” he said.
“The town’s position is that the property belongs to the town,” Hull said.
According to documents on file at the Lincoln County Registry of Deeds, Alton and Linda Simmons bought the Turner Road property Aug. 8, 1989 for a price of $15,000.
On Jan. 31, 2005, the Simmons’ entered into a 30-year mortgage agreement with CitiFinancial, a Maryland corporation.
On May 9, 2011, CitiFinancial Inc., filed a complaint for foreclosure against Alton and Linda Simmons. The complaint said the unpaid principal balance due them as of April 27, 2011 was $107,352 and asked for a judgment of foreclosure and sale. It was signed by attorney Carrie Folsom of Bendett & McHugh, a legal form specializing in debt collection and based in Farmington, Conn.
On Dec. 10, 2012, the court issued a judgment of foreclosure and sale in favor of CitiFinancial, stating that the plaintiff was owed a total of principal, accrued interest and deferred interest of $138,680, as well as attorney’s fees of $3175 and an attorney’s disbursement of $732.
A list of known parties to the action did not include the town of Bremen.
On Jan. 28, listing its address as 300 St. Paul Place in Baltimore, CitiFinancial filed an assignment of mortgage on the property to Christiana Trust, a division of Wilmington Savings Fund Society, FSB, as trustee for Stanwich Mortgage Loan Trust.
Hull said Christiana is a private trust that purchases mortgages.
He said he spoke with a representative of Bendett and McHugh Jan. 23 and followed up the next day with a letter describing the status of the tax lien. He said he sent Bridget Thornbach of that firm all the tax lien documents.
Hull said he learned of the assignment to Christiana in late March, while reviewing documents at the Registry of Deeds. After researching Christiana Trust, Hull contacted the trust’s three attorneys, he said, and told them of the town’s intent to sell the property.
“About 10 days ago, Shannon Merrill of Bendett and McHugh contacted me,” Hull said.” He said that April 11 conversation was the first of a series of phone calls and email messages in which Merrill asked for information.
“We told her about the auction and that she could bid, of course, but the town’s position was that the tax lien had foreclosed and the town owned the property,” he said. “I didn’t hear anything further until I was told Wednesday [April 17] they had obtained a temporary restraining order to prevent the auction.” He said CitiFinancial and Christiana Trust made no effort to contact the town, in spite of Maine Rules of Procedure that require such notification.
Hull said an emergency hearing was scheduled for April 24, but that his request for a continuance was granted. A new hearing date has not been set, he said.
A notice of Christiana’s foreclosure sale was published April 11 in the Boothbay Register. Hull said a private citizen saw the notice and brought it to the town’s attention.
“I wouldn’t consider it to be a newspaper of general circulation in the Bremen area,” Hull said. He said the town had already advertised its auction of the property prior to that time.
Hull said CitiFinancial’s argument revolves around whether they receive proper notice of the tax lien foreclosure, “because they didn’t receive notice at the time and by the method they think is appropriate.” He said they also allege that Alton and Linda Simmons did not receive notice. Hull said the town has receipts showing the documents were properly delivered.
In his counterclaim, Hull asserted that CitiFinancial was notified of the 2010 and 2011 tax lien certificates and 30 day automatic foreclosure notices “by a direct telephonic conversation, and a letter mailed by the US mail to its attorneys, Bendett & McHugh on January 24, 2013. The Town gave notice of its tax lien foreclosure and intended public sale to the Plaintiff by electronic mail on April 10, 2013,” according to the town’s April 19 answer to the complaint.
While Citi and Christiana have expressed willingness to pay back taxes, Hull said the town now owns the property and there are no longer any taxes due.